Credit Growth Approaches Double-Digit Level, OJK Optimistic That Economic Recovery Will Continue

Illustration (Photo: Doc. Antara)

JAKARTA - The Financial Services Authority (OJK) reported that the banking intermediation movement was getting more nimble at the beginning of the year by recording growth approaching double digits on an annual basis (year on year / yoy).

OJK Deputy Commissioner for Public Relations Anto Prabowo said that until the close of April 2022, bank credit rose by 9.10 percent yoy and 3.69 percent year to date/ytd (January-April 2022). Then for third party funds (DPK) grew by 10.11 percent yoy or 0.08 percent ytd.

“This result increased significantly from March which grew 6.67 percent yoy. By sector, credit for the mining and manufacturing sectors recorded the largest increase in mtm of IDR 21.5 trillion and IDR 20.8 trillion, respectively," he said in an official statement quoted on Thursday, May 26.

Meanwhile, the insurance industry recorded a collection of insurance premiums in April 2022 of Rp. 21.8 trillion, with details of life insurance of Rp. 8.6 trillion, general insurance and reinsurance of Rp. 13.2 trillion.

Then, fintech P2P lending in April 2022 recorded an outstanding financing of IDR 38.68 trillion or grew by 87.7 percent yoy. Receivables from finance companies in April 2022 grew by 4.51 percent yoy.

In the capital market, as of May 24, 2022, the number of public offerings made by issuers reached 79 with a total value of raising funds of IDR 100.1 trillion.

"The improvement in intermediation performance occurred in the midst of the global economy which is still facing persistently high inflationary pressures and has prompted more aggressive tightening of monetary policy by the majority of the world's central banks," he continued.

Meanwhile, the risk profile of financial services institutions in April 2022 was still relatively well maintained with the gross NPL ratio of banks recorded at 3.00 percent (net NPL 0.83 percent).

Meanwhile, banking liquidity is at an adequate level. The ratio of liquid assets (non-core deposits and liquid assets/DPK) as of April 2022 was monitored at the level of 131.21 percent and 29.38 percent, respectively, above the thresholds of 50 percent and 10 percent, respectively.

"Going forward, OJK will continue to strengthen coordination with stakeholders in order to maintain financial system stability, especially in anticipating the risk of global inflationary pressures and tightening of world central bank policies," concluded Anto.